Thus far, the fund has acquired seven multifamily properties. A further four apartment acquisitions are scheduled to close in January and February of the New Year. HPI expects to fully deploy the remainder of the fund’s equity in one additional acquisition during the first quarter of 2017.

The fourth fund is a successor to three other successful funds. HPI Fund I went full cycle in 2014 with a 14.5 percent IRR net to investors, while HPI Fund II went full cycle in 2016 with a 14.6 percent IRR net to investors. Both funds had hold periods of just over four years. HPI is targeting a late 2017 liquidation of HPI Fund III, which would result in another four-year term.

Investors are still eager to put equity into multifamily. “HPI saw no decline in its ability raise and deploy capital in 2016, despite the DOL Fiduciary Rule, FINRA Rule 1502 and REIT and BDC sales dropping by as much as 75 percent for the year,” said HPI co-founder David Kelsey.

HPI’s strategy, explained co-founder Matt Sharp, is to buy post-2000 construction apartment properties in secondary growth markets for below replacement cost. Then the company does modest common area and unit interior upgrades to increase revenue. “We’ve avoided the super-expensive, tier-one markets that have become overbuilt and overpriced,” he noted.